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Old 02-23-07, 02:40 PM   #1
genman
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Taxes and cycling

I'm new here, but I did a search on "tax" and didn't find any articles. I came up with an idea, perhaps not so new, but I'd like to discuss...

I was in a bicycle shop the other day, and I heard that in B.C. Canada that purchases of bicycles were exempt from consumption (sales) tax. I thought this might be a good idea.

In the U.S., the government offers a tax credit ($2000) for those who buy (supposedly low-emission) hybrid vehicles. This is to hopefully offset the cost of these more expensive cars and encourage manufacturers to keep building more efficient cars.

Do you think that there should be some sort of encouragement on the part of government for increased bicycle purchases? The underlying goal would be to get people out of their cars. I'm not sure how such a tax credit, deduction, or sales tax exemption could work. It could be paid to:

1. Those that use the cycle primarily for transportation to and from their job.
2. Ride at least 5 miles a week, on average.
3. The employer has identified this person as riding 5 miles, on average.

Any credit would be based on the purchase price of the cycle, over the expected life of the cycle, e.g. 3-5 years.

The city of Redmond, WA provides (through my wife's employer) gift certificates to those who take the bus at least a few times a week. This is done to help alleviate traffic issues in the town.
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Old 02-23-07, 03:07 PM   #2
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This has been discussed in A & S but in comparison to most of the topics that get rehashed in here again and again I think this one is definitely worth talking about and getting ideas.

In past threads the argument I've received from some was that they didn't feel as cyclists we should be entitled to a free ride or, for that matter, what some feel is a paid ride.

I believe that since cycling reduces traffic congestion, reduces emissions, reduces demand on foreign oil, has tremendous health benefits and is less taxing on roads and transportation infrastructure than other means of transport (auto, truck, bus) it does enough public good and ultimately saves on tax revenues and should therefore entitle transportational bicyclists to some form of tax credit. Whether that tax credit comes in the form of a reduced or zero sales tax on bikes or as payroll deduction benefit or an after tax credit I could care less but I'd sure like to feel a little bit of acknowledgement for the contribution I make to the public good by riding a bike everyday.

That said it would have little or no bearing on my choice to ride everyday.
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Old 02-23-07, 03:25 PM   #3
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We have a Commuter Rewards program here in Atlanta. They give you something like $3 a day, each day you bike, carpool, or use mass transit. Snafu: I didn't qualify, because I wasn't commuting in a single-occupancy motor vehicle.

If you're already doing it, you can't qualify for the reward. Oh, well, I've got my reward, anyway.

Link:

http://www.commuterrewards.com/cash_for_commuters
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Old 02-23-07, 07:54 PM   #4
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Try looking at the LAB website. there is a alternate transportation tax credit program that employers could give, but cycling was not included. LAB and others are working to get cycling included, but I do not believe the battle goes well for our side.
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Old 02-23-07, 08:26 PM   #5
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For me, bicycle commuting is a reward in and of itself.
And for a little Devils Advocacy, how can one prove that the bicycle was bought for commuting and not trail riding or rec/fitness? I can't see getting a tax break on a hobby such as mountain biking.

However, I do support gimme-gimmes for bicycle commuters, I'm just silent about it, as well as most things.
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Old 02-23-07, 09:41 PM   #6
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The basic argument goes that by riding a bike instead of driving a car you save on fuel taxes. If you don't own a car at all, you save on sales tax, registration, and insurance. These are pretty hefty tax savings that require no legislation, record keeping, or oversight.

Incentives on buying a hybrid vehicle is intended to provide a tax incentive to buying a hybrid over a conventional automobile. Otherwise, the driver pays about the same taxes as a conventional automobile driver. The incentives are almost certainly designed to kickstart the market for high priced hybrids so that manufacturers will either make profit, or minimize losses, on hybrids, thus encouraging continued development and improvement.

So, the motivating factors that led to hybrid incentives do not apply to cycling, as the cycling industry needs no new market to spur development. The bicycle is already a very mature technology. Not to mention that cyclists already enjoy significant tax savings over driving.

The practical impediment to implementing a cycling tax incentive are that it would be nearly impossible to enforce any sort of requirement that participants in the program actually ride their bicycles.
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Old 02-24-07, 07:30 AM   #7
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Quote:
Originally Posted by supcom
The basic argument goes that by riding a bike instead of driving a car you save on fuel taxes. If you don't own a car at all, you save on sales tax, registration, and insurance. These are pretty hefty tax savings that require no legislation, record keeping, or oversight.

Incentives on buying a hybrid vehicle is intended to provide a tax incentive to buying a hybrid over a conventional automobile. Otherwise, the driver pays about the same taxes as a conventional automobile driver. The incentives are almost certainly designed to kickstart the market for high priced hybrids so that manufacturers will either make profit, or minimize losses, on hybrids, thus encouraging continued development and improvement.

So, the motivating factors that led to hybrid incentives do not apply to cycling, as the cycling industry needs no new market to spur development. The bicycle is already a very mature technology. Not to mention that cyclists already enjoy significant tax savings over driving.

The practical impediment to implementing a cycling tax incentive are that it would be nearly impossible to enforce any sort of requirement that participants in the program actually ride their bicycles.

Besides, those Hybrid drivers need to save up, for when there Hybrid is 7-8 years old, and the batteries start to fail, apparently a replacement battery is something like $7000.
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Old 02-24-07, 08:42 AM   #8
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+1 'Sup - there is no need to put in a financial incentive to ride - it's already Waaaaaaay cheaper than driving and often cheaper than taking the bus/subway (if you are taking more than two rides a day for example - you pay something like $100 mo for a transit pass in toronto - more than I spend on my bikes).

If you wanted to promote cycling over say, walking, then it might help to have the incentive, but I think the price signal is already there.

That being said - I can't argue with a little extra money for me
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Old 02-24-07, 12:52 PM   #9
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On the national level, there is Senate Bill 2635.

A couple of local bike blog articles:
BikePortland.org
BTA

This info is from last summer... not sure where things stand as of now. Maybe you should ask your Senator for an update.
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Old 02-24-07, 04:11 PM   #10
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The UK has a nice incentive scheme, where your company buys the bike and deducts the cost from your gross pay over the year, so you save the income tax on the bikes cost. I would like to see all car fees(licence, public liability insurance, car sales tax) rolled into a massive tax on the fuel. The way things stand now, if you own a car but hardly ever use it you are still stuck with these costs.
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Old 02-25-07, 07:14 AM   #11
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Quote:
Originally Posted by Wogsterca
Besides, those Hybrid drivers need to save up, for when there Hybrid is 7-8 years old, and the batteries start to fail, apparently a replacement battery is something like $7000.
and 1400 dollars plus for exhaust systems, you know there is no after market exhaust for a prius, right? (or there wasnt when I worked at Toyota)




BIKES not BATTERIES!!
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